Housing Recovery Is Here to Stay, Dallas Fed Says

The U.S. housing recovery appears sustainable, according to new research from the Federal Reserve Bank of Dallas.

“A necessary condition for the home construction recovery to continue is a sustainable home-price turnaround,” wrote John Duca, vice president and associate director of research at the Dallas Fed, in a report titled “The Long-Awaited Housing Recovery.” Based on several metrics, he wrote, “this condition appears to have been met.”

U.S. home prices bottomed out in 2011. Their subsequent rise, Mr. Duca wrote, appears consistent with “key measures” such as the inventory of homes on the market, the cost of renting versus owning and the affordability of mortgage payments.

Still, he wrote, “while the U.S. housing recovery will probably continue for some time, its pace and composition will be affected by the nature of the labor market recovery, the movement of mortgage interest rates and the difficult-to-predict evolution of credit availability to prospective homebuyers and to homebuilders and developers.”